Indicate
by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding
12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes /x/ No / /

There
were 15,620,471 of the Registrant's Common Stock issued and outstanding on October 29, 1999.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

7

Part II.

Other Information

Item 4. Submission of Matters to a Vote of Security Holders

10

Item 6. Exhibits and Reports on Form 8-K

10

SIGNATURES

11

Part I. Financial Information

TITAN PHARMACEUTICALS, INC.
(a development stage company)

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30,
1999
(unaudited)

December 31,
1998
(Note A)

Assets

Current assets

Cash and cash equivalents

$

9,147,297

$

11,654,896

Prepaid expenses and other current assets

134,023

139,958

Total current assets

9,281,320

11,794,854

Furniture and equipment, net

421,305

416,956

Other assets

15,959

15,783

$

9,718,584

$

12,227,593

Liabilities and Stockholders' Equity

Current Liabilities

Accounts payable

$

249,298

$

410,235

Accrued clinical trials expense

477,700

653,218

Other accrued liabilities

432,004

516,770

Total current liabilities

1,159,002

1,580,223

Commitments

Minority interestSeries B preferred stock of Ingenex, Inc.

1,241,032

1,241,032

Stockholders' Equity

Preferred stock, at amounts paid in

5,000,000

5,000,000

Common stock, at amounts paid in

58,445,715

52,291,369

Additional paid-in capital

6,524,247

6,524,204

Deferred compensation

(157,760

)

(286,580

)

Deficit accumulated during the development stage

(62,493,652

)

(54,122,655

)

Total stockholders' equity

7,318,550

9,406,338

$

9,718,584

$

12,227,593

Note
A: The balance sheet at December 31, 1998 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements.

See
Notes to Condensed Consolidated Financial Statements

2

TITAN PHARMACEUTICALS, INC.
(a development stage company)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)

Three Months Ended
September 30,

Nine Months Ended
September 30,

Period from
Commencement
of Operations
(July 25, 1991) to
Sept 30, 1999

1999

1998

1999

1998

License and grant revenue

$

52,340

$



$

99,000

$



$

17,997,281

Operating expenses:

Research and development

1,748,864

2,138,166

6,558,394

5,289,946

51,262,073

Acquired in-process research and development





135,785



10,321,785

General and administrative

837,657

805,214

2,153,766

2,808,743

24,203,589

Total operating expenses

2,586,521

2,943,380

8,847,945

8,098,689

85,787,447

Loss from operations

(2,534,181

)

(2,943,380

)

(8,748,945

)

(8,098,689

)

(67,790,166

)

Other income (expense):

Equity in loss of Ansan Pharmaceuticals, Inc.









(2,046,939

)

Gain on sale of technology









8,361,220

Interest income

119,811

189,652

421,405

678,545

3,106,147

Interest expense







(87

)

(4,389,902

)

Other (expense) income

(30,359

)

(362

)

(43,457

)

41,607

221,074

Other income, net

89,452

189,290

377,948

720,065

5,251,600

Loss before minority interest

(2,444,729

)

(2,754,090

)

(8,370,997

)

(7,378,624

)

(62,538,566

)

Minority interest in losses of subsidiaries









44,914

Net loss

$

(2,444,729

)

$

(2,754,090

)

$

(8,370,997

)

$

(7,378,624

)

$

(62,493,652

)

Deemed dividend upon conversion of preferred stock









(5,431,871

)

Net loss attributable to common stockholders

$

(2,444,729

)

$

(2,754,090

)

$

(8,370,997

)

$

(7,378,624

)

$

(67,925,523

)

Basic and diluted net loss per common share

$

(0.16

)

$

(0.21

)

$

(0.55

)

$

(0.56

)

Shares used in computing basic and diluted net loss per share

15,453,642

13,123,508

15,180,094

13,103,513

See
Notes to Condensed Consolidated Financial Statements

3

TITAN PHARMACEUTICALS, INC.
(a development stage company)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)

Nine Months Ended Sept 30,

Period from Commencement of Operations
(July 25, 1991) to Sept 30, 1999

1999

1998

Cash flows from operating activities

Net loss

$

(8,370,997

)

$

(7,378,624

)

$

(62,493,652

)

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization expense

244,521

220,185

1,986,825

Issuance of common stock to acquire technology





5,500,000

Payment of guaranteed security value



(3,044,409

)

(3,044,409

)

Accretion of discount on indebebtedness





2,290,910

Equity in loss of Ansan Pharmaceuticals, Inc.





2,046,940

Other



13,016

(239,336

)

Issuance of common stock to acquire minority interest of Theracell, Inc.

Titan Pharmaceuticals, Inc. (the "Company" or "Titan"), was incorporated in February 1992 in the State of Delaware. Titan is a biopharmaceutical
company developing proprietary therapeutics for the treatment of central nervous system disorders, cancer and other serious and life-threatening diseases. Titan conducts a portion of its
operations through two subsidiaries: Ingenex, Inc. ("Ingenex") and ProNeura, Inc. ("ProNeura"). The Company and its subsidiaries operate in one industry segment.

Ingenex, Inc.

Ingenex is engaged in the development of gene-based therapeutics for the treatment of cancer. At September 30, 1999, the Company owned 81%
of Ingenex, assuming the conversion of all preferred stock to common stock.

ProNeura, Inc.

ProNeura is engaged in the development of cost effective, long term treatment solutions to neurologic and psychiatric disorders through an implantable drug
delivery system. At September 30, 1999, the Company owned 79% of ProNeura.

Theracell Merger

On March 10, 1999, a majority owned Company subsidiary, Theracell was merged with and into Titan. Pursuant to the merger, the Company recorded an
in-process research and development expense of approximately $136,000, related to the acquisition of the shares held by the minority shareholders.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include the accounts of Titan and its majority owned subsidiaries after elimination of
all significant intercompany accounts and transactions. These financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and
with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by
generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair
presentation have been included. Operating results for the nine-month period ended September 30, 1999 are not
necessarily indicative of the results that may be expected for the year ended December 31, 1999. These financials should be read in conjunction with the audited consolidated financial
statements and footnotes thereto included in the Titan Pharmaceuticals, Inc. annual report on Form 10-K for the year ended December 31, 1998.

2. Net Loss Per Share

The Company calculates basic and diluted net loss per common share using the weighted average shares outstanding for the period. Had the Company been in a net
income position, diluted earnings per share as of September 30, 1999 and 1998 would have included an additional 12,285,488 and 11,694,667

In January 1999, the Company completed a private placement of 2,254,545 shares of its Common Stock for net proceeds of approximately $5,798,000, after
deducting fees and commissions and other expenses of the offering. The Company's comprehensive loss was the same as the Company's net loss for the reporting periods.

4. Subsequent Event

In October 1999, the Company called for redemption on November 19, 1999 (the "Redemption Date") of its outstanding Class A Warrants for
cash at the redemption price of $0.05 per warrant. Rather than surrendering the warrants for redemption, warrant holders may exercise their rights to purchase the Company's Common Stock at a price of
$6.02 per share at any time prior to 5:00PM EST on the Redemption Date. In connection with the redemption, the Company entered into an advisory agreement with Deutsche Bank Securities Inc.
pursuant to which the Company agreed to pay an advisory fee of $2 million payable on the Redemption Date if at least $30 million is received from warrant exercises, or in installments if
more than $15 million but less than $30 million is raised. If less than $15 million is raised, $1 million of Deutsche Bank's fee will be in the form of warrants. Also in
connection with the redemption, the Company amended the warrant agreement to terminate D.H. Blair Investment Banking Corp.'s solicitation rights in consideration for the payment to Blair of 2.7% of
the warrant exercise proceeds.

6

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion contains certain forward-looking statements, within the meaning of the "safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995, the attainment of which involves various risks and uncertainties. Forward-looking statements may be identified by the use of forward-looking terminology such as "may," "will,"
"expect," "believe," "estimate," "anticipate," "continue" or similar terms, variations of those terms or the negative of those terms. The Company's actual results may differ materially from those
described in these forward-looking statements due to, among other factors, the results of ongoing research and development activities and preclinical testing, the results of clinical trials and the
availability of additional financing through corporate partnering arrangements or otherwise.

Results of Operations

Since its inception, the Company's efforts have been principally devoted to product and technology development, clinical research, raising capital, and
securing patent protection. At September 30, 1999, the Company had an accumulated deficit of approximately $62,494,000, resulting from expenditures for product development and general and
administrative activities.

Revenues
from a U.S. government grant for the three and nine months ended September 30, 1999 were approximately $52,000 and $99,000, respectively. There were no revenues for
the three and nine months ended September 30, 1998.

Research
and development expenses for the third quarter of 1999 were approximately $1,749,000 compared to $2,138,000 for the same quarter in 1998, a decrease of 18%. Planned
expenditures for the third quarter of 1999 were based on prioritizing company resources for the development of CeaVac, Pivanex and Spheramine, and support its
other programs through NIH and various other grants. For the nine months ended September 30, 1999, research and development expenses were $6,694,000, including $136,000 of acquired
in-process research and development related to the acquisition of minority interest of Theracell, compared to $5,290,000 for the same period in 1998, an increase of 27%. Research and
development spending for the nine months in 1999 were within budget, and the planned increase compared to 1998 was primarily due to patient enrollment in the Phase II clinical trial with
CeaVac in colorectal cancer and the final phases of the pre-clinical program for Spheramine with anticipated clinical trial commencement by the end of the year.

General
and administrative expenses for the third quarter of 1999 were approximately $838,000 compared to $805,000 for the same quarter in 1998, an increase of 4%. For the nine months
ended September 30 1999, general and administrative expenses were $2,154,000 compared to $2,809,000 for the same period in 1998, a decrease of 23%. The decrease for the nine months was due to
the Company's planned consolidation of operations and ongoing efforts to contain non-research operating costs.

Other
income, net of other expenses for the three and nine month periods ended September 30, 1999 were approximately $89,000 and $378,000, respectively, compared to $189,000
and $720,000, respectively, for the same periods in 1998. The decreases were primarily a result of reduced interest income during 1999 compared to the same periods in 1998.

Impact of Year 2000

General

The "Year 2000 Issue" is the result of computer programs being written using two digits rather than four to define the applicable year. Computer programs or
hardware that have date-sensitive software or embedded chips may recognize a date using "00" as the year 1900 rather than the year 2000. This could result in a system failure or
miscalculations causing disruptions of operations, including, among other things, a temporary inability to process transactions, or engage in similar normal business activities.

7

System Assessment

Most of Titan's Information Technology ("IT") and Non-IT systems were Year 2000 compliant when purchased. The Company believes, therefore, it will
not be required to implement significant modifications or replace significant portions of its software and hardware in order to be Year 2000 compliant. The Company is, however, taking steps to ensure
that the Year 2000 Issue does not have a material impact on the operation of the Company.

Significant
functions related to the Company's clinical trials are carried out by contract research organizations ("CROs"). These functions include, but are not limited to, clinical
study monitoring, biostatistics, data management and drug manufacturing. To the extent that the systems of CROs produce incorrect information or cause incorrect interpretation of the information that
they produce, the Company is at risk for making invalid conclusions about the nature, efficacy, or safety of its products or technologies which could lead to abandoning potentially lucrative products
or technologies or invalidly continuing development and pursuing FDA approval of others. The Company is in the process of contacting its significant suppliers and CROs and requesting that they provide
certificates of compliance with relation to this issue. At this time the Company is not aware of any suppliers or CROs with a Year 2000 Issue that would materially impact the Company's results of
operations, liquidity, or capital resources. However, the Company has no means of ensuring that its suppliers or CROs will be Year 2000 ready. The inability of its suppliers or CROs to complete their
Year 2000 resolution process in a timely fashion could materially impact the Company. The effect of non-compliance by other external agents is not determinable.

Costs and Contingencies

To date, the Company has expended only internal costs to assess the Year 2000 Issue. Letters of Year 2000 compliance from internal software providers tend to
indicate that the Company will not be exposed to any material expenditures for replacements of such systems, however there can be no assurance of this. Also, it is not yet possible to ascertain if any
expenditure will be required to replace systems, subcontractors or the work performed by such subcontractors. While vendor assurances and internal testing are useful in assessing Year 2000 issues,
neither can provide absolute assurance that no Year 2000 problems will or can occur. During 1999, the Company will continue to refine its plans in an attempt to assure the Year 2000 Issue will not
materially adversely affect their business operations or financial condition.

Liquidity and Capital Resources

The Company has funded its operations from inception primarily through private and public sales of its securities, corporate partnerships and government
grants. During 1997, the Company received approximately $25,861,000 from license fees and the sale of a research technology.

In
October 1999, the Company called for redemption on November 19, 1999 (the "Redemption Date") of its outstanding Class A Warrants for cash at the redemption
price of $0.05 per warrant. Rather than surrendering the warrants for redemption, warrant holders may exercise their rights to purchase the Company's Common Stock at a price of $6.02 per share at any
time prior to 5:00PM EST on the Redemption Date. In the event that all of the warrants are exercised, the Company will receive gross proceeds of up to $42,700,000 before deducting fees and expenses.
In connection with the redemption, the Company entered into an advisory agreement with Deutsche Bank Securities Inc. pursuant to which the Company agreed to pay an advisory fee of
$2 million payable on the Redemption Date if at least $30 million is received from warrant exercises, or in installments if more than $15 million but less than $30 million
is raised. If less than $15 million is raised, $1 million of Deutsche Bank's fee will be in the form of warrants. Also in connection with the redemption, the Company amended the warrant
agreement to terminate D.H. Blair Investment Banking Corp.'s solicitation rights in consideration for the payment to Blair of 2.7% of the warrant exercise proceeds.

8

In January 1999, the Company completed a private placement of 2,254,545 shares of its Common Stock for net proceeds of approximately $5,798,000, after deducting fees and
commissions and other expenses of the offering.

In
November 1998, the Company agreed to guarantee certain potential obligations of the Company's Chief Executive Officer, related to the Company. The Company's Chief Executive
Officer has pledged approximately 300,000 shares of the Company's common stock, owned by the Chief Executive Officer, to secure the guarantee by the Company. Under said guarantee, the Company may be
obligated to make a payment of up to $400,000.

Titan
has entered into various agreements with contract research organizations, academic institutions, and other entities for the performance of research and development activities
and for the maintenance of licenses related to those activities. The aggregate commitments the Company has under these agreements, including minimum license payments, for the next 12 months is
approximately $2,316,000. Certain of the licenses provide for the payment of royalties by the Company on future product sales, if any. In addition, in order to maintain license and other rights while
products are under development, the Company must comply with customary licensee obligations, including the payment of patent related costs and meeting project-funding milestones.

In
May 1998, the Company negotiated a $5,000,000 bank line of credit that expires in March 2000. To date the Company has not borrowed against this facility.

The
Company expects to continue to incur substantial additional operating losses from costs related to continuation and expansion of product development, clinical trials, and
administrative activities over at least the next several years. To preserve operating capital, the Company has chosen to strategically focus on development of its later stage products in clinical
development, and at least temporarily
reduce or eliminate spending on certain preclinical programs. While the Company has sufficient working capital to sustain planned operations for a period greater than 12 months, the Company may
seek additional financing, depending on numerous factors including, but not limited to, the amount of proceeds received by the Company upon the exercise of its Class A Warrants, the progress of
the Company's product development programs, the results of clinical studies, technological advances, determinations as to the commercial potential of the Company's products, and the status of
competitive products. In addition, certain expenditures will be dependent on the establishment of collaborative relationships with other companies, the availability of financing, and other factors. In
any event, the Company may require substantial additional financing in the future. There can be no assurance as to the availability or terms of any required additional financing, when and if needed.

9

PART II

Item 4. Submission of Matters to a Vote of Security Holders

On August 30, 1999, the Company held its Annual Meeting of Shareholders. Matters voted upon at the meeting and the number of affirmative votes, negative
votes, withheld votes and abstentions cast with respect to each such matter were as follows:

Affirmative
Votes

Withheld
Votes

1.

Election of the Company's Directors:

Louis R. Bucalo, M.D.

10,046,861

108,022

Ernst-Gunter Afting, M.D., Ph.D.

10,046,261

108,622

Victor J. Bauer, Ph.D.

10,046,861

108,022

Eurelio M. Cavalier

10,045,861

109,022

Michael K. Hsu

10,046,811

108,072

Hubert Huckel, M.D.

10,046,361

108,522

Marvin E. Jaffe, M.D.

10,046,361

108,522

Konrad M. Weis, Ph.D.

10,046,461

108,422

Kenneth J. Widder, M.D.

10,046,861

108,022

Affirmative
Votes

Against
Votes

Abstentions

2.

Approval of the appointment of Ernst & Young LLP as independent auditors:

10,090,953

57,100

6,830

Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits

10.32

Advisory Agreement between the Registrant and Deutsche Bank Securities Inc. (effective as of October 18, 1999)